Turning two Car Leasing companies into a single integrated whole that harnesses the existing values

The Problem

Probably the most challenging aspect of post-merger integration is to develop a single coherent organisation that still protects and enshrines the unique values of the legacy businesses. This was the issue at stake following ING Car Lease’s acquisition of Appleyard Vehicle Contracts. The move represented an increase in ING’s fleet from 16,000 to 43,000 units, and the addition of 115 Leeds-based staff to ING’s 100 staff, based in Bracknell. Appleyard was operating efficiently, but substantial synergies were still possible; both operations were similar, vertically integrated businesses, carrying out the same functions but at different sites.

Our Solution

We were engaged to help ING and Appleyard establish a single business without duplication and without destroying their existing values. Our task was to develop a Target Operating Model (TOM) which was accepted by the joint management team and ING Group in the Netherlands, protected the businesses, and delivered required financial savings . A key factor was our unique approach to designing TOMs. We focus on designing how the business will operate, on a single page, which gives people a more ‘real’ picture that a purely technical organisational structure ever could. With ING and Appleyard our approach was to:

  • Develop clear Design Principles. We agreed principles which we would then use to guide all future decisions. We agreed that: the goal was a single business with a single set of functions servicing a single set of customers; the best of each organisation would be selected objectively; two sites would remain; and that certain components were ‘givens’, such as ING’s IT system.
  • Design a logical Target Operating Model for the business. We designed the new TOM, taking from the most effective functions within the legacy models. We objectively assessed the relative strengths of each function using performance metrics and through open and robust discussions with the Executive team.
  • Agree the model. We ran a workshop with the Executive team, lasting two full days, to agree what functions would remain where, which ones would move and what the resulting business would look like. The result? We had agreement for each of the 30 functions listed, which we grouped into logical business units that established critical mass.
  • Establish a programme of change. We set up a programme to deliver the changes including: the functions of the business; the products and other impacts on customers; processes, systems, data, and infrastructure; and people, roles and structures.

Client's Benefits

The exercise was a success, with a smooth integration of both businesses’ legacy vehicle books and combined supplier and staff savings of 15%, or £3m p.a., through synergies. Most importantly, the resulting organisation was more than the sum of its two halves. It was underpinned both by Appleyard’s effective operational capability and ING brand principles, systems, risk appetite and controls. This successful integration enabled the new business to deliver 35% RoE.